We see new opportunities emerging in adjacent markets
Where do you see the main potential for Allnex to expand its presence in the Asia Pacific region?
Miguel Mantas: Our upcoming new owner, PTT Global Chemical Limited (GC), is a Thailand based multinational chemical company with a broad portfolio of upstream, intermediate, and downstream petrochemical products for industries such as packaging, textiles and automotive. GC is a subsidiary of PTT Group, which is the premier multinational energy company in Thailand and a Fortune Global 500 company.
Given GC’s leading position in the Chemicals business in Asia, Allnex will benefit from ample local support and resources to continue to drive its growth in Asia Pacific, which today is already Allnex’s largest Sales region and comprises 15 Manufacturing sites in 9 countries. Additionally, Allnex also already has several investments under execution in Asia Pacific in different locations right now, the biggest being our announced new Manufacturing hub in Dushan Port, Zhejiang, China. There are therefore several important potentials being addressed concurrently, both creating natural capacity expansions for our existing business and localising further technologies in the Asia Pacific region. With the support of GC’s strong capabilities this approach will be boosted further.
Are there particular countries or coating sectors you plan to target/further expand first?
Mantas: Our expansion strategy looks both at the general themes of localising our technologies in key regions for our customers and to cover any remaining important white spot in our geographical Manufacturing footprint. Our target markets, such as Automotive, Industrial Wood, Industrial Metal, Marine, Protective, Decorative or Packaging Coatings & Inks, among many others, are driven by the big societal and industry megatrends and we have therefore to focus on the changes and developments in all the markets that we are a part of, which not all evolve in one single direction or at the same pace. Our customers let us know the struggles they face and what their end-users need, and we then develop specific new localised products to meet those needs.
Beside the multiple existing projects under execution, we anticipate that as part of GC new projects will be developed to further expand our presence in China, South Asia and Southeast Asia that were already on our radar screen in terms of growth focus priorities. We also see new opportunities emerging in adjacent markets for Allnex, such as batteries, electronics and high end composites.
Allnex’s revenue and net profit is up on the previous year, has the pandemic or the effects of it, required any adjustment to your portfolio to achieve this? Did it impact the timeline of the acquisition at all?
Mantas: As with everyone, the pandemic was difficult for Allnex as well. Our industry being deemed essential during the lock-down, we were nonetheless able to keep going to produce a plethora of needed products. The challenge was of course keeping our employees safe during this time, but we rapidly implemented effective protocols that allowed us to successfully ensure this, as well as the necessary operations continuity.
Our portfolio did shift fluidly, reflecting the different stages of the pandemic, either emphasizing delivery of urgent items for pharmaceutical or food packaging early in the pandemic, including the manufacturing of medical-grade hand sanitiser for donations at many of our sites, or the broad industrial demand recovery later on. The very strong rebound in the industrial coatings markets in the second half of 2020, which has since continued seamlessly into 2021, has nonetheless created the basis for our strong performance last year. This year, like all the industries we serve, we are facing both very strong demand and the new challenges of raw material and logistics bottlenecks, as well of the associated strong inflation of their cost.
As for the acquisition, the pandemic didn’t affect the timeline whatsoever.